BarTalk October 2004
Volume 16, Number 5

It’s time for discriminatory tax to go, says CBA

British Columbia is the only province in Canada with a special tax that targets only legal services and no other learned profession. It was brought in under the guise of “offsetting the cost of legal aid” by then Finance Minister Glen Clark, in 1992. It has never been used as a direct funding source for that purpose. It goes into General Revenues and is spent on the priorities of the government of the day. How much does the tax raise? More than $100 million last year alone. The government’s allocation to civil and criminal legal aid? $55 million.

The Social Services Tax Act includes provisions for taxing a hodgepodge of products and services including sales (the PST), leases, vehicles, telecommunications, parking, and environmental levies on tires and batteries. The only professional service contained in this list is legal services.

Some other provinces tax professional services; no other province taxes only legal services. It is a discriminatory and unfair tax on the people and businesses of B.C. And for those with few financial resources, it is yet another barrier to accessing justice. People don’t choose to use legal services because they want to – they do so because they need legal help – to conduct business, prevent or resolve disputes, or defend against charges made by others or the state.

The tax also imposes an additional, unnecessary and uncompetitive cost of doing business in British Columbia. This is particularly true for high volume legal consumers such as the biotechnology and film industries. As for corporations? When a business is looking to locate to Canada, or a deal involving multiple parties could be negotiated and signed anywhere, the tax makes B.C. uncompetitive with other provinces. The deal-makers know there is an extra 7.5 per cent added to every legal bill in B.C.

The Canadian Bar Association, B.C. Branch has created a Social Services Tax Task Force, with representation from across the province and from diverse practice areas, to tackle this issue head-on. The Task Force is leading the CBA’s advocacy campaign to have legal services removed from the list of products and services subject to the SST.

The CBA’s campaign includes meetings with MLAs and Ministers, submissions to the Finance and Government Services Committee, and, most importantly, building a network of alliances with strong business groups whose members and constituents are harmed by this tax.

The Branch has allocated significant financial and volunteer resources to this campaign, as a clear priority of members. With a healthy surplus on the way, the provincial government is in “listening mode” – and we intend to be heard.

This article was published in the October 2004 issue of BarTalk and is subject to the copyright by the British Columbia Branch of the Canadian Bar Association, 2004, all rights reserved.